Tatneft-3 · RUS:TATN
Tatneft-3 — PJSC Tatneft — Investor Day (December 2016)
37 slides from Tatneft-3's investor day presentation, Dec 12, 2016
Slide 1: Presentation to Investors and Analysts
Copyright © PJSC TATNEFT, 2016 PRESENTATION TO INVESTORS AND ANALYSTS 20 YEARS OF LISTING ON THE LONDON STOCK EXCHANGE Investor Day London 12 December 2016
Slide 2: Important Notice About Forward-Looking Statements and Disclaimer
IMPORTANT NOTICE ABOUT FORWARD-LOOKING STATEMENTS AND DISCLAIMER THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED IN ANY FORM OR FURTHER DISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. FAILURE TO COMPLY WITH THESE RE
Slide 3: Speakers
SPEAKERS Nayl U. Nurislam Z. Vladlen A. Vasily A. MAGANOV SYUBAEV VOSKOBOINIKOV MOZGOVOI General Director, Deputy General Director Head of International Financial Assistant to the Chairman of the of PJSC TATNEFT Reporting, member of the General Director Management Council, for Strategic Development,
Slide 4: Content of the Presentation
CONTENT OF THE PRESENTATION STRONG DEVELOPED CAPABILITIES AS THE FOUNDATION 1 FOR A NEW PHASE OF GROWTH 2 OPERATIONS. 2016 PRELIMINARY RESULTS. PLANS FOR 2017 3 STRATEGY 2025 4 3Q 2016 IFRS RESULTS 5 CAPITAL STRUCTURE 4
Slide 5: Tatneft: Strong Developed Capabilities as the Foundation for a New Phase of Growth
TATNEFT: STRONG DEVELOPED CAPABILITIES AS THE FOUNDATION FOR A NEW PHASE OF GROWTH 5
Slide 6: Tatneft Growth Milestones
TATNEFT GROWTH MILESTONES }r`o{ ank|xncnosrh ËÅÒ ÍÀ×ÈÍÀ¿ÑÊÎÍÖÀ97** ÏÎÈÑÊÈÍÅÔÒÈÍÀÒÅÐÐÈÒÎÐÈÈÑΠÐÅÌÅÍÍÎÃÎrÀÒÀÐÑÒÀÍÀÁÛËÈÌÀËÎÓÑÏÅØÍÛ ÍÎÒÅÌ ÍÅÌÅÍÅÅÓÏÎÐÍÛrÎËÜÊÎÅÌÃÎÄÓÁÛËÎÎÒÊÐÛÒÎxÓÃÓÐÎÂÑÊÎÅ ÌÅÑÒÎÐÎÆÄÅÍÈÅ bÒÅ×ÅÍÈÅÒÐÅÕÑËÅÄÓÞÙÈÕËÅÒÁÛËÈÎÒÊÐÛÒÛ`ÊÑÓÁÀÅÂÑÊÎÅ ÈaÀÂËÈÍÑÊÎÅÌÅÑÒÎÐÎÆÄÅÍÈÅ ÀÎÌÎÒÊÐÛÒÎÎÄÍÎÈÇÊÐÓÏ ÍÅÉØÈÕÂÌ
Slide 7: Human Capital
HUMAN CAPITAL Human Capital is the foundation of the Company’s success Advanced competencies Comfortable working environment Occupational safety and health Talents Professional growth Industrial safety Motivation and KPIs Development and training Environmental safety The Company’s commitment to be a
Slide 8: Technological Capabilities
TECHNOLOGICAL CAPABILITIES The Company possesses the industry’s leading technologies and has vast experience in crude oil extraction, refining, and petrochemicals production – from the stage of project inception to optimization of processes in existing operations. Aims of the Company’s Innovation Po
Slide 9: Examples of Technologies Used in Drilling and Crude Oil Production
EXAMPLES OF TECHNOLOGIES USED IN DRILLING AND CRUDE OIL PRODUCTION By using modern technologies and equipment, as well as through optimization of completions, Tatneft achieves increased efficiency and control over per-unit costs upon production. Horizontal drilling Multilateral completions Hydraulic
Slide 10: Resource Base and Assets
RESOURCE BASE AND ASSETS Crude oil and condensate reserves, MBbls Consolidated Assets (SPE-PRMS) (under IFRS/US GAAP, RR billion) 301 346 392,216 Proved Developed 339 298 Producing 282 129 Proved Developed 183 32 131 2,467,176 3,508,667 Nonproducing 32 77 Proved Undeveloped 9m2016 24 2015 Probable 2
Slide 11: Operations, 2016 Preliminary Results, Plans for 2017
OPERATIONS 2016 PRELIMINARY RESULTS PLANS FOR 2017 11
Slide 12: Crude Oil Production: 2016 Preliminary Results and Plans for 2017
CRUDE OIL PRODUCTION: 2016 PRELIMINARY RESULTS AND PLANS FOR 2017 Crude oil production, projections Crude oil production 2016 2017 th. tonnes/ MBbl/ chg. th. tonnes/ MBbl/ chg. 74,7 76,2 year 76,7 day to 2015 year day to 2016 тыс. тонн в тыс. тонн в тыс. тонн в день день день PJSC Tatneft Convention
Slide 13: Refined Products Output: 2016 Preliminary Results and Plans for 2017
REFINED PRODUCTS OUTPUT: 2016 PRELIMINARY RESULTS AND PLANS FOR 2017 Refined products output at TANECO, projections 2016, tonnes 2017, tonnes Inputs: Crude oil 8 675 409 7 813 102 Vacuum gasoil from third parties 459 165 431 950 Auxiliary 72,4 materials 275 874 410 725 тыс. Total тоннraw materials 9
Slide 14: TANECO Configuration in 2017
TANECO CONFIGURATION IN 2017 IV quarter 2017 (expected) Stable Gas Naphtha (1 700 thous. t/y) Benzene cut (12 thous. t/y) Naphtha splitter Current Launch in 2017 Naphtha HDT CCR Platforming Izomerization MTBE CDU/VDU-7 Motor Gasoline AI – 92 (69 thous. t/y) Gasoline blending Motor Gasoline AI – 95 (
Slide 15: Investments
INVESTMENTS Funds allocated towards investment program financing FY 2016 Expectations, RR bn 74,7 76,7 2017 Forecast, RR bn 72,4 тыс. тыс. тыс. тонн в тонн в день день тонн в день Exploration Exploration 10.8 5.9 2 17.6 Production and Production and Development in Tatarstan Development in Tatarstan
Slide 16: Strategy 2025
STRATEGY 2025 16
Slide 17: Strategy 2025: Macroeconomic Forecast
STRATEGY 2025: MACROECONOMIC FORECAST Exchange rate forecast, RUR/USD 90 81 78 76 75 74 73 Crude oil price forecast (Urals, ARA), USD/bbl. 80 72 71 70 68 RUR/USD 70 61 80 60 66 64 61 70 50 58 59 59 60 60 68 57 70 66 64 40 62 60 30 60 53 20 51 47 10 50 42 USD/bbl. 41 0 40 45 2015 2016 2017 2018 2019
Slide 18: Strategy 2025: Emphasis on Increasing the Value of Tatneft Group and Mitigating Risks
STRATEGY 2025: EMPHASIS ON INCREASING THE VALUE OF TATNEFT GROUP AND MITIGATING RISKS (A MORE BALANCED PORTFOLIO) August 3, 2016: The Board of Directors of PJSC Tatneft approved the Strategy of development of Tatneft Group to 2025 which assumes doubling value of the Group (in US Dollar terms) by 202
Slide 19: Strategy 2025: Strategic Projects Contribution
STRATEGY 2025: STRATEGIC PROJECTS CONTRIBUTION Successful execution of strategic projects is the key factor to increase profits and value/capitalization of Tatneft Group. 85% of EBITDA growth is achieved through increasing oil production (both conventional and highly viscous) in the home region – th
Slide 20: Strategy 2025: Oil Exploration
STRATEGY 2025: OIL EXPLORATION Tatneft Group’s exploration division aims for 100% replacement of economically recoverable resource base In the home region – the Republic of Tatarstan 1 Increasing efficiency in conventional oil exploration for matured fields (supplementary exploration, increasing the
Slide 21: Strategy 2025: Oil Production
STRATEGY 2025: OIL PRODUCTION Tatneft Group’s oil production division aims for sustainable organic growth • Decreasing per-unit operating costs by 10% or more • Studying the feasibility of production growth provided by the existing resource endowment Production volumes, mln tonnes Key indicators Ind
Slide 22: Strategy 2025: Oil Production - Costs
STRATEGY 2025: OIL PRODUCTION - COSTS As a part of cost-reduction strategic initiative a number of projects are being implemented with some encouraging initial results, proving their effectiveness. More cost-cutting initiatives are being considered within the Group. Procurement optimization Other ro
Slide 23: Strategy 2025: Refining
STRATEGY 2025: REFINING • Completion of the TANECO project (full utilization rate of both first and second trains of the TANECO facilities) • Decreasing per-unit processing costs by 10% and more at Tatneft Group’s oil and gas processing entities (real prices) • Development of highly marginal supply
Slide 24: TANECO Configuration in 2023
TANECO CONFIGURATION IN 2023 IV quarter 2023 (projected) Current Benzene (64 thous. t/y) Launch in 2017 Naphtha splitter Aromatic production Paraxylene (158 thous. t/y) Launch in 2018 Petrochemical Naphtha (330 thous. t/y) Launch in 2019 Naphtha HDT CCR Platforming Izomerization 1st Launch in 1st tr
Slide 25: Strategy 2025: Retail Business
STRATEGY 2025: RETAIL BUSINESS • Over 50% sales of the Company’s own gasoline and diesel fuel via proprietary retail network and wholesale • Unique selling proposition: updated brand-concept, improved quality of filling stations and service standards, modification to regional coverage Retail Network
Slide 26: Strategy 2025: Tires Business
STRATEGY 2025: TIRES BUSINESS • Keeping strong leading market positions in Russia and covering new market niches by effective implementation of marketing programmes, improvement in quality and expansion of product range Sales and Price Positioning Key indicators mln 18 units 2015 2016 2025 Indicator
Slide 27: Strategy 2025: Power and Heat Generation, Manufacturing
STRATEGY 2025: POWER AND HEAT GENERATION, MANUFACTURING Power and heat generation Equipment manufacturing • Fuel diversification programme is being • Timely and reliable supply of high quality implemented at Nizhnekamsk Power Plant equipment, services and anticorrosive pipe (transferring to petroleu
Slide 28: Strategy 2025: Main Steps for Strategy 2025 Deployment
STRATEGY 2025: MAIN STEPS FOR STRATEGY 2025 DEPLOYMENT Corporate strategy 2025 Deployment and implementation of Strategy 2025 Fine-tuning the Group’s management organizational structure 1 Tatneft Group development • Identification of business-units with clear zone of responsibility of their leaders
Slide 29: 3Q 2016 IFRS Results
3Q 2016 IFRS RESULTS 29
Slide 30: Key Financial Indicators
KEY FINANCIAL INDICATORS Chg. %, 2Q (in RR bn) 2013 2014 2015 9m2016 3Q 2016 3Q2016 / 2016 2Q2016 Sales, gross 646.6 646.3 657.4 475.4 165.9 173.1 4% Export duties & excise tax (191.6) (169.9) (104.7) (60.1) (19.0) (25.7) 35% Revenue, net 455.0 476.4 552.7 415.2 146.9 147.4 0% Costs and other deduct
Slide 31: Revenue
REVENUE Net revenue by products, RR bn 552.7 476.4 5% 455.0 7% 6% 415.2 5% 7% 7% 4% Other sales 39% 8% 39% 42% Petrochemicals 37% 4% 146.9 147.4 Refined products sales 4% 48% 49% 51% 8% 8% 45% 35% 37% Crude oil sales 54% 51% 2013 2014 2015 9m 2Q 3Q 2016 2016 2016 Crude oil sales by destination marke
Slide 32: Costs
COSTS Cost per barrel breakdown*, RR/bbl 1,867 1,729 1,742 1,766 Other expenses 1,596 1,669 11% 8% 7% 9% 8% 11% 9% 8% 7% 9% 9% Transportation expenses 10% 13% 13% 14% 13% 13% 15% Selling, General and 30% 33% 30% 33% 32% 34% Administrative expenses Operating expenses 37% 37% 38% 34% 38% 37% Taxes oth
Slide 33: Capex and Debt Profile
CAPEX AND DEBT PROFILE 9m 2016 capital expenditures* by segments, RR bn Debt profile (at period ends), RR bn Short-term debt 1.0 70 Refining & Marketing, TANECO construction Long-term debt, net of current portion 23.1 50 Refining & Marketing, Net Debt other 30 19.8 Exploration & 39.4 Production 0.5
Slide 34: Capital Structure
CAPITAL STRUCTURE 34
Slide 35: Capital of the Company
CAPITAL OF THE COMPANY Composition of capital (30 September 2016 ) Equity Ordinary share Preferred ADR Equity and debt RR bn share Number 2,178,690,700 147,508,500 Up to 108,934,535 Ordinary shares 74,7 697,726 76,2 76,7 Preferred shares тыс. тонн 26,832 тыс. тонн тыс. Treasury shares (of тонн 75,48
Slide 36: Capitalization and Shareholders
CAPITALIZATION AND SHAREHOLDERS Capitalization dynamics (4 January – 6 December 2016) Moscow Exchange, 06-Dec Value appreciation 422.95 RR Ordinary shares (TATN), RR 17-Nov 399.55 RR Ordinary shares (RR) 74,7 76,2 76,7 starting from 18-Mar тыс. тонн тыс. тонн тыс. тонн 30 December: 364 RR 10-Nov в в
Slide 37: Contacts
Web-site: www.tatneft.ru Contacts: Headquarters: 75, Lenin st., Almetyevsk, Republic of Tatarstan, Russian Federation, 423450 IR. Phone: +7 495 98052 26 E-mail: info@tatneft.net 37